Towards a Solution
| Author | Christopher Jessel |
| Pages | 235-246 |
Chapter 19
Towards a Solution
19.1 THE RULE AND ITS REASON
The rule that positive covenants can not be enforced against a successor in title to the original covenantor is contrary to the wishes of many contracting parties and litigants, impedes the proper administration of estates, causes difficulties between neighbours, and has effectively outlawed freehold flats. While the indirect methods described in this book can work, they are complicated to draft and set up, sometimes of doubtful validity and often expensive to operate. Nevertheless the rule is well established and has been repeatedly upheld by the courts. On the face of it that is puzzling: why should the judges so resolutely maintain such a policy? The answer is twofold, firstly as a rule of substantive law and secondly in relation to remedies and practical enforcement.
Firstly there is the expectation that a contract should bind and benefit the parties to it and no one else. That is the common law position. Equity, and later statute, intervened to permit the assignment of benefits but required safeguards and formalities. This reluctance to extend the benefit of contracts is not limited to the judges. The most recent attempt in the Contracts (Rights of Third Parties) Act 1999 to permit third parties to sue has had a limited acceptance among lawyers. It has become standard practice to include in contracts a clause excluding the operation of that Act. There is a concern that allowing even the benefit of a contract to pass could create problems for the future and, where assignment is contemplated, it is usually subject to conditions. That being the case for the assignment of benefit, it is hardly surprising that transfer of burden is not acceptable.
Secondly the courts may be unwilling to grant a suitable remedy. Although the law will, in principle, hold the parties to their obligations under a personal contract, any legal system makes it easier to prohibit undesired activities than to require something to be done. A judge can award damages or the right to enter
236 Positive Covenants and Freehold Land
and do the work but they may not be adequate; a mandatory injunction may be available in principle but not in practice because of the perceived need for a judge to supervise works or a course of conduct. From ancient times laws have said ‘thou shalt not’ do something, typically in relation to the criminal law or to what in the common law is called a tort and in the civil law a delict; they have been less inclined to say ‘thou shalt do this’ particularly in the context of property law. What the covenantee requires is specific performance of the obligation.
19.2 IS THE RULE ABSOLUTE?
The devices discussed in this book can be seen either as legitimate different approaches to achieve a proper purpose or as devious attempts to avoid an established legal rule. Traditionally judges have responded to attempts by counsel to use arguments to side-step the effects of common law rules in one of two ways. Firstly, where it is considered that the rule is archaic and obstructs useful practices, they may allow, or even encourage, litigants to develop and use a technical device to reach a desired result. Over the centuries legal fictions have been employed in order to develop the law, where the formal rules have come to be regarded as obstructing justice. In the property context one instance is the procedure of ejectment with its imaginary Doe and Roe; another is the easement doctrine of lost modern grant. The judges allowed these to emerge at a time when statutory reform was unusual. In modern centuries the courts have tended to take the position that it is for Parliament to change the law and it is not the responsibility of judges.
Alternatively, where the rule exists in the public interest, the judges may insist on the substance being observed, so that no device, however clever, will be allowed to avoid it. There are many examples of the policy of preferring substance over form. The rule against perpetuities applied strictly to prevent any postponement of a contingent interest after the perpetuity period;
or prohibiting the tenant from resisting a notice to quit.
purpose of tax avoidance, the courts will look through the documents to the real effect.
These cases were decided in the context of public policy. It is undesirable that wealth should be tied up in one family for generations or that fraud should prosper or that statutory security of tenure should not be respected or that taxes should be avoided. There is no similar public policy objection to the enforcement of positive covenants against successors in title.
Public policy was invoked to support the rule on positive covenants in Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd.
the parties share an expectation that the servient owner will in fact undertake the requisite management, maintenance and repair of the servient tenement, and of any structures, fittings or even chattels located thereon. The only essential requirement (imposed to prevent land being burdened to an extent contrary to the public interest) is that the servient owner has undertaken no legal obligation of that kind to the dominant owner.
While as a general rule easements do not oblige the servient owner to do works (leaving aside the...
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